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Shakuntala Devi Vs. N.D. Khullar - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 250 of 1977
Judge
Reported in1978RLR289
ActsCode of Civil Procedure (CPC), 1908 - Order 8, Rule 6; Court fees Act
AppellantShakuntala Devi
RespondentN.D. Khullar
Advocates: C.L. Itorora and; G.N. Aggarwal, Advs
Cases ReferredIn Tara Iron and Steel Co. Ltd. v. R.N. Gupta
Excerpt:
.....payment made by an unauthorised agent and not ratified until after set-off pleaded may be pleaded in defense to a set-off (k).'it follows, as explained by barman,..........(3rd edition) :-- 'where there has been payment, the party against whom the claim is brought pleads payment or accord and satisfaction (1), which in effect alleges that the claim no longer exists. a plea of set-off, on the other hand, in effect admits the existence of the claim, and sets up a cross claim as being found on which the person against whom the claim is brought is excused from payment and entitled to judgment on the plaintiff's claim. until judgment in favor of the defendant on the ground of set-off has been given, the plaintiff's claim is not existinguishment (j).(10) payment is a good answer to set-off, and a payment made by an unauthorised agent and not ratified until after set-off pleaded may be pleaded in defense to a set-off (k).' it follows, as explained by.....
Judgment:

S. Ranganathan, J.

(1) This is a Civil Revision Petition to revise the order dated 2-3-1977 in suit No. 125 of 1976 deciding a preliminary issue framed by the Court and directing the defendant to pay court-fee on a sum of Rs. 2,875 in the following circumstances.

(2) The plaintiff was the owner of premises No. F 25 Nizamudin West New Delhi. The defendants were the legal representatives of Sri Daulat Ram who was the tenant of the premises. The tenancy was terminated by the plaintiff by a notice dated 1-9-1975 and a petition for eviction under the Delhi Rent Control Act was also filed before the Rent Controller, Delhi. It is stated that the eviction order was duly passed and possession was also taken by the landlord on the 30th July 1976.

(3) In the meantime the landlord also filed suit No. 125 of 1976 on the 30th June, 1976, in the Court of the Senior Sub. Judge, Delhi for the recovery of Rs. 2,875 with costs. This represented a claim for the arrears of rent of Rs. 2,700 for the period from 1-9-1975 to 29-2rl976, interest of Rs. 110 on the above sum and Rs. 65 by way of notice charges. In paragraphs 5 and 6 of the plaint it was stated that the rent for the above period had fallen due and not been paid in spite of demands thereforee. The plaintiff thereforee prayed for a decree for the sum of Rs. 2,875 and costs.

(4) The defendants filed a written-statement. The facts regarding the tenancy as set out by the landlord and also the fact that the rents had not been paid up to 1st September 1975 were admitted. In paragraph 5 of the written-statement however it was claimed that the defendants had spent a sum of Rs. 4,170.61 on the premises in question for expanding the main gate, for installing additional power-load, for white washing and painting the premises and for certain repairs. It was stated that these payments were supported by documentary evidence and that as a result of this expenditure the utility, beauty and value of the premises have been considerably enhanced. It was claimed that the defendants were 'legally entitled to adjust these payments from the plaintiff' It was alleged in paragraph 7 that the plaintiff had not adjusted these expenses but had rushed to the court with his claim only and that the defendants were entitled 'to refund of the amount spent on the premises in question.' In view of the above, it was prayed that the suit should be dismissed with costs,

(5) The learned trial Judge framed a preliminary issue as to whether the defendants were liable to pay court fee for the claim of adjustment made in the written-statement. After hearing arguments he came to the conclusion that the defendant was liable to pay court-fee. However, having regard to the fact that though the defendants claimed to have spent Rs. 4,170.61 they had claimed adjustment only to the extent of Rs. 2,875 and had not filed any further claim for the balance, he directed that the defendants should pay advalorem court-fee on the sum of Rs. 2,875. It is against this decision of the sub Judge that this revision petition has been filed.

(6) On behalf of the petitioner it is contended that the claim raised in the written- statement was only a defense to the plaintiff's action. It was only plea of 'adjustment' and cannot be regarded as a claim for set off falling within order 8, Rule 6 and Art. I of Schedule I to the Court Fees Act.

(7) Order Viii Rule 6, of the Civil Procedure Code permits the defendant in a money suit to claim a 'set off against the plaintiff's demand' in the suit of 'any ascertained sum of money legally recoverable by him from the plaintiff' A written statement claiming such a set off will have the same effect as a cross- suit. Rule 6-A introduced in Order Viii by the recent amendment makes a provision in respect of a counter-claim. Art. 1 in Schedule 1 of the Court Fees Act provides that where a written statement pleads a set off or a counter claim, advalorem court-fee in respect of the amount so claimed is payable. In the present case the defendants have admitted that arrears of rent are due to the plaintiff but it is claimed that since the defendants have spent certain sums of money on the tenanted premises and since the defendant is entitled to recover these monies from the plaintiff such sums should be set off against the amounts claimed by the plaintiff. Sri Aggarwal appearing for the respondents submitted that in the present case the sums in question were not legally recoverable by the defendants from the plaintiff inasmuch as the relevant requirements of the Delhi Rent Control Act or the Transfer of Property Act were not fulfillled, and that the proper course for the defendants to recover the sum of Rs. 4,170.61 or any part thereof was only by way of a separate suit. It is not necessary for the present purpose to go into this question or to consider whether the defendants claim against the plaintiff will ultimately succeed or not But there can be no manner of doubt that the defendants, who admit the claim of the plaintiff regarding the arrears of rent, are in reality claiming a set-off. In my opinion thereforee the learned Sub Judge was justified in calling upon the defendants to pay Court-fee on the amount of set-off claimed by the defendants.

(8) Learned counsel for the petitioner submitted that the claim of the petitioner in this case was not a claim for set-off but only a claim for an adjustment. The word 'adjustment' as such does not occur in the relevant statutory provisions but has been explained in judicial decisions. The essence of a claim for adjustment, like a plea of payment, is that the plaintiff's claim has already been discharged or satisfied to the extent of the claim and so no longer subsists. In the State of Madhya Pradesh v. Raja Balbadhra Singh, : AIR1964MP231 it was pointed out that when two persons have certain accounts and monies are payable by each to the other they are both entitled to mutual adjustments of the monies provided they are really due and recoverable. A claim for such adjustments cannot be treated as a claim for set off or a counter claim. Such a case is clearly distinguishable from the present. In the case of a mutual and current account the purport of a claim of adjustment is that the amount as claimed by the plaintiff is not due and that, if proper account be taken, the amount really due will be much less. A plea of adjustment is really akin to a plea of payment. This decision itself points out :-

'The distinction between payment and adjustment is that payment is made to the creditor while the adjustment is made by the debtor himself.'

(9) In Tara Iron and Steel Co. Ltd. v. R.N. Gupta, 0065/1963 : AIR1963Ori174 it was .held that a plea of satisfaction or existinguishment of a debtor claim, set up merely by way of defense is very different from the plea of set- off. Narasimham, C. J. pointed out the difference between 'set off' on the one hand and 'payment or adjustment' on the other quoting the following passage at p 396 of Vol. 34 of Halsbury's Laws of England (3rd Edition) :--

'Where there has been payment, the party against whom the claim is brought pleads payment or accord and satisfaction (1), which in effect alleges that the claim no longer exists. A plea of set-off, on the other hand, in effect admits the existence of the claim, and sets up a cross claim as being found on which the person against whom the claim is brought is excused from payment and entitled to judgment on the plaintiff's claim. Until judgment in favor of the defendant on the ground of set-off has been given, the plaintiff's claim is not existinguishment (j).

(10) Payment is a good answer to set-off, and a payment made by an unauthorised agent and not ratified until after set-off pleaded may be pleaded in defense to a set-off (k).' It follows, as explained by Barman, J. in the same case

'A plea of payment necessarily refers to a satisfaction or extinguishment of a debt effected prior to the stage of the defense, whereas a plea of set-off is in the nature of a cross claim and in effect it prays for a satisfaction or existinguishment of a claim to be made in the future after the date when the plea has been set up.'

(11) In the present case no adjustments had been effected by the defendants prior to the stage of defense. Sri Aggarwal has stated that actually there has been no claim put for ward by the defendant in respect of any such plea earlier to the stage of defense. Even in the written statement it is only alleged that the defendants were legally entitled to adjust these payments from the plaintiff' and that they were entitled to a 'refund of amount spent on the premises in question.' In other words, the liability of the defendants' claim will have to be adjudicated upon as an issue in this suit and if it is found that the defendants have such a claim against the plaintiff, it will have to be set-off against the claim made by the plaintiff.

(12) The learned Sub Judge has rightly held that the present case falls within the ratio of the Full Bench decision of the Punjab High Court in Dr. Jessie George W.N.S. v. M/s. Shakuntla Hari Das Air 1950 P&H; 225. The plea of the defendant here obviously is that though they are in arrears of rent, the claim of the plaintiff should not be decreed because they are entitled to a legal or equitable set-off of the considerable expenditure incurred by them in respect of the premises to the extent of the claim put forward. As pointed out by the Full Bench there is no justification for drawing any distinction between a case of a claim for legal set-off and one of equitable set-off for purposes of Court-fee.

(13) The fact that the plea raised by the defendant was only by way of defense does not mean that it is not a claim for set-off. As pointed out in Halsbury Vol. 3rd Ed. p. 395 :

'INits effect set-off is essentially different from counter claim in that set-off is a ground of defense, a shield and not a sword, which if established, affords an answer to the plaintiff's claim wholly or protanto, whereas counter claim as such affords no defense to the plaintiff's claim but is weapon of offence which enables a defendant to enforce a claim against the plaintiff as effectually as in an independent action.'


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